J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade… read more

America’s Health-Care Divide

BERKELEY – In 1883, the authoritarian imperial government of Prince Otto von Bismarck – who famously declared, “It is not by speeches and majority votes that the great issues of our time will be decided…but by blood and iron” – established national health insurance for Germany.

The rationale for national health insurance is as clear now as it was to Bismarck 130 years ago. A country’s success – whether measured by the glory of its Kaiser, the expansion of its territory, the security of its borders, or the well-being of its population – rests on the health of its people.

Serious illness can strike anyone, and seriously ill people, as a rule, do not earn much money. The longer the seriously ill are untreated, the more costly their eventual treatment and maintenance become.

Private savings, as a rule, can pay the costs of treatment only for the thrifty and the well-off. So, unless we adopt the view that those without ample savings who fall seriously ill should quickly die (and so decrease the surplus population), a country with national health insurance will be a wealthier and more successful country. These arguments were entirely convincing to Bismarck. They are equally convincing today.

On January 1, 2014, the United States will partly implement a law – the Affordable Care Act (ACA) – that will not establish national health insurance, but that will, according to projections by the Congressional Budget Office, reduce by almost one-half the number of people in the US without health insurance. Back in 2009, President Barack Obama could have proposed a program as comprehensive as the one initiated by Bismarck. Such a program could have allowed, encouraged, and made it affordable for uninsured Americans to obtain health insurance similar to what members of Congress have; or it simply could have expanded the existing Medicare system for those over 65 to cover all Americans.

Instead, Obama put his weight behind the complicated ACA. The reason, as it was explained to me back in 2009, was that the core of the ACA was identical to the plan that former Massachusetts Governor Mitt Romney had proposed and signed into law in that state in 2006: “ObamaCare” would be “RomneyCare” with a new coat of paint. With Romney the Republican Party’s presumptive nominee for the 2012 presidential election, few Republicans would be able to vote against what was their candidate’s signature legislative initiative as governor. Thus, the US Congress, it was supposed, would enact the ACA with healthy and bipartisan majorities, and Obama would demonstrate that he could transcend Washington’s partisan gridlock.

We know how that worked out. Not a single Republican voted for the Affordable Care Act in the House of Representatives. One Republican senator – Olympia Snowe of Maine – voted for it in committee, but then switched sides, threatened to kill it via filibuster, and voted against its final passage.

As for Romney, he refused to recognize any kinship between his bill and the ACA – sort of like when he refused to recognize details surrounding the participation in the 2012 Olympics of a Dressage horse that he owned,

But now January 1, 2014 is looming, and the Affordable Care Act is about to be implemented – but perhaps not everywhere. In the south and other Republican-controlled regions, legislators have refused to answer constituents’ questions about how to negotiate the new, changed bureaucracy. They have also refused the federal dollars earmarked to expand their state-level Medicaid programs. And they have refused to lift a finger to establish the “exchanges” that are supposed to give individuals and small businesses the same access to health insurance at competitive prices that employees of large businesses get via their companies’ benefits departments.

In the Democratic-controlled “blue” states, where 60% of the US population lives – and which account for 70% of national income and 80% of its wealth – implementation of the ACA is likely to be like that of RomneyCare in Massachusetts: a somewhat bumpy ride, but a clear success that nobody will wish to repeal after the fact. But no one knows what will happen in the “red states,” where the Republican political infrastructure is digging in its heels.

What will doctors and hospital administrators in Phoenix, Kansas City, Houston, and Atlanta do after they talk to their colleagues in Los Angeles, Seattle, Minneapolis, Chicago, Baltimore, and New York, where state governments and political structures are trying to make ACA implementation a success? Will they compare and contrast the conditions under which they are working? Which candidates will they support with donations and votes in the 2014 and 2016 elections? What will nurses and patients denied the benefits of the ACA do?

America’s partisan heat is about to be turned up over the next several election cycles, as the blame game begins. Bismarck would know who is at fault.

Comments

Without context, you have a compelling case for National Health Insurance.

With context, you still have the same thing, but you should mention that the USA now allows stalker gangs to openly poison people - as I have been for the last 16 years, while the government and police just watched. ( See "gang stalking" ).

This means that one hand of the government is trying to help people while the other hand of the government is failing to protect people. The net effect driving companies away from the USA, diminishing the reputation of the USA and is a long term drag on growth as those who can relocate elsewhere do so - which they are in doing in droves.

The political strategy of Obamacare was driven by much bigger issues than cornering the Republicans on RomneyCare. Important conflicting business and political interests were navigated. Single Payer was not even remotely achievable politically.

The Red states have no choice but to accept most of Obamacare; most of the obstructionism is futile. What matters is medicaid expansion, of course. I agree with the author that the political winds will push in favor of acceptance of medicaid expansion, but those winds are unfortunately more of a breeze. The public in many of those red states have a high tolerance for uninsured poor people; government-subsidized health care is anathema to the powerful Tea Party. Poor people vote at low levels, and medicaid is always vulnerable. It will take a decade to fully implement Obamacare.

Alberto Bagnai, ET AL
want the Greek government to abandon the euro – and all other eurozone members to follow suit.

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